COURT FILE NO.: CV -11-433936
MOTION HEARD: 20150219
REASONS RELEASED: 20150904
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
Daniel Wasson
Plaintiff
and
Sun Life Assurance Company of Canada
Defendant
BEFORE: MASTER D. E. SHORT
COUNSEL: Ron Preyra Fax: 416.256.1707
- for the Plaintiff
Michael McLoughlin Fax: 416.979.3209
- for Defendant
RELEASED: September 4, 2015
Reasons for Decision on Status Hearing
I. Nature of Hearing
[1] On March 7, 2014, the registrar issued a Status Notice as the action had not been set down for trial within 2 years of the filing of the first defence. In response, plaintiff’s counsel requested a Status Hearing. The defendant. Sun Life advised that it would be opposing the establishment of a new case timetable and required that the plaintiff show cause why the action should not be dismissed for delay.
[2] On May 7, 2014, a Notice of Status Hearing was issued by the registrar for a hearing in the fall of 2014. Following adjournments, the matter came on for hearing before me in February of 2015.
[3] It may be of some relevance that while the matter was pending, the applicable rule was deletedfrom the Rules of Civil Procedure, effective as of January 1, 2015.
II. Background
[4] The affidavit filed on behalf of the plaintiff by his counsel summarizes the background facts as follows:
“2. This action arises out of injuries sustained by Mr. Daniel Wasson as a result of a motor vehicle accident, which occurred on August 27, 2008.
- At the time of the subject accident, Mr. Wasson was working as a truck driver with Rona Inc. and while in the course of his employment, was attempting to jay walk across Highway 27 at its intersection at Langstaff Road in order to reach a coffee shop, when he was struck by a motor vehicle, thereby sustaining serious personal injury, including a fractured left clavicle, fractured ribs, low back and a left knee injury requiring surgery and a likely future knee replacement.
[5] The accident gave rise to a variety of proceedings.
• Wasson v. Petrovic, (Tort) issued December 29, 2008
Discoveries conducted December 16, 2010
Resolved August 29, 2011
• Wasson v. Northbridge Insurance (AB)
- Resolved February 3, 2013
• Wasson v. Sun Life
- the present action
[6] From this brief outline it is clear that the plaintiff was engaged in proceedings related to the accident through to at least February of 2013
[7] The extent of the parties’ liability to each other in the present actionis , to a degree, dependent on the outcome of those other proceedings. As well, matters arising from the intersection of his employer’s disability insurance coverage , Workplace Safety coverage and the outcome of the accident benefit and tort claims, all needed to be considered in moving the action forward in the most efficient and economical way.
III. The Sun Life Claim
[8] Mr. Wasson understood that through his employment with Rona Inc. he was provided with an employee handbook, which document included basic information on his disability coverages. Understandably he was not provided with a copy of the underlying insurance policy as between the Defendant and Rona Inc.
[9] It would seem clear that issues arose based upon the policy provisions and restrictions applicable to injuries suffered while Mr. Wasson was “at work”.
[10] Mr. Wasson applied for and ultimately was granted short term disability benefits from the Defendant from August 28, 2008 to December 24, 2008 at the rate of $591.88 per week, the maximum benefit period available to him. He subsequently received long term disability benefits in the amount of $1,986.30 per month. Those benefits were paid to him for a two year period ending on December 25, 2010, at which time the Defendant refused to pay further benefits to the Plaintiff on the basis that he was not “totally disabled” as required by the insuring agreement.
[11] The position of Sun Life was confirmed by a denial letter dated December 23, 2010.
[12] At the time of the subject accident, Mr. Wasson had a statutory right as a worker injured in the course of his employment, to pursue a claim for benefits through the Workplace Safety and Insurance Board (“WSIB”), or to proceed with a civil action.
[13] He applied to the WSIB for a determination of his benefits but ultimately chose to proceed with a civil action against the driver of the vehicle that hit him.
[14] Having exercised his option, he was precluded from receiving benefits from the Board.
[15] By letter dated September 24, 2010 the Defendant was advised of Mr. Wasson's election to proceed with a civil action.
IV. Sun Life Position
[16] In this action the Defendant takes the position that it does not owe the Plaintiff any further disability benefits and by way of crossclaim, seeks to claw back benefits in the amount of $64,155.53 as an offset based upon the WSIB benefits that Mr. Wasson could have been expected to receive had he not exercised his statutory right to pursue a tort claim.
[17] Mr. Wasson’s counsel argues that although his client was aware that Sun Life had a right to claim reimbursement for some duplicate benefits received by him from other sources, he was not aware nor did his employee handbook make it clear that he would have to repay benefits to Sun Life against compensation that he never received and which he was unable to receive due to the exercise of his statutory election.
[18] Thus the plaintiff asserts that by virtue of his condition there are benefits owed to him between December 25, 2010 and the present. The Defendant's counterclaim relates to the interpretation of its contract which it asserts allows it credit for unpaid WSIB benefits that otherwise may have been made available to Mr. Wasson. As this is a disability insurance action, any contributory negligencey of the employee is not relevant to these entitlement issues..
V. Counterclaim
[19] In my view, the existence of a counterclaim in this case gives use gives rise to a need for a broader analysis than that required at a more typical Status Hearing.
[20] The Statement of Defence and Counterclaim sets out these paragraphs under a heading, “Disability Benefit Offsets ”:
“14. According to the Policy, the amount of the STD and LTD benefits otherwise payable thereunder by Sun Life is to be reduced by any other income provided to the plaintiff, Including any amounts:
• For the same or a subsequent disability under any government-sponsored plan excluding dependent benefits, employment insurance benefits and automatic cost-of-living Increases under any government-sponsored plan that occur after benefits begin
• For the same or a subsequent disability under any Workers’ Compensation Act or similar law, excluding automatic cost-of-living Increases that occur after benefits begin
If you are eligible for any of the income amounts above and do not apply for them, we will still consider them part of your income. We can estimate those benefits and use those amounts when we calculate your payments. [Emphasis added]
- To the knowledge of Rona Inc., the price of the coverage made available to its employees under the Policy was affected by the expected and actual level of LTD payments made pursuant to the Policy. By negotiating for and agreeing to the inclusion of various offsets in the Policy, including the offset of Workers' Compensation
(“WSIB”) benefits for which employees such as the plaintiff were otherwise eligible, Rona Inc. could influence the level of LTD benefits payable thereunder, and hence the price of the Insurance coverage. Sun Life pleads that Rona Inc. expressly agreed to the inclusion in the Policy of the aforesaid offset clauses and to the reduction in LTD benefits payable by Sun Life to its employees, including the plaintiff, by the estimated amount of WSIB benefits for which those employees, including the plaintiff, would have been eligible had due appllcatlon been made for such benefits.
- Sun Life pleads that the WSIB benefits for which the plaintiff was eligible would have exceeded the STD and LTD benefits otherwise payable under the Policy. Taking those WSIB benefits into account, the plaintiff's STD and LTD benefit entitlement under the Sun Life Policy was nil. Sun Life has therefore overpaid disability benefits to the plaintiff and he is indebted to Sun Life for the sum of $64,155.53.
[21] There was no indication before me that Sun Life was willing to abandon its counterclaim in the event that the plaintiff’s claim was not permitted to proceed. Thus the counterclaim will still need to be tried or otherwise resolved.
[22] In my view, the same evidence will be relevant in evaluating what amount, if any, needs to be repaid.
[23] Moreover, the affidavit filed on behalf of the plaintiff states that in June 2013 the Workplace Safety and Insurance Board indicated that:
“…it may allow Mr. Wasson to claim benefits under the Act if he recovered less in the civil action than what he would have otherwise received from the Board and subject to the Board's approval.”
[24] Apparently counsel for the plaintiff has submitted a request for approval to the Board pursuant to section 30(14) of the Workplace Safety and Insurance Act, 1997 which has not yet been adjudicated upon.
[25] His counsel further submits that the results of that adjudication will significantly affect the Plaintiff's ability to resolve this action.
[26] Obviously, the more clarity that can be obtained, the more likely the parties are to reach an out-of-court resolution. The previous uncertainty may have been one of the reasons, the plaintiff failed to provide clear instructions to his counsel at the time Of the Issuance of the Status Notice.
VI. Difficulty in Obtaining Instructions
[27] When this Status Hearing was first scheduled to be heard, counsel for the plaintiff brought what was styled “Notice of Cross-Motion to the Status Hearing”
[28] The affidavit of counsel filed on the earlier return date was in part intended to support an application to remove his firm from the record due to an inability to find his client to obtain instructions. The affidavit filed at that time indicated the following
- As a result, Sun Life claimed an overpayment from Mr. Wasson. Although Sun Life cited case law to suggest that Mr. Was son is bound by the terms of the group policy, it remains the Plaintiff's position that the specific clause relied upon was never brought to his attention, nor was he notified of his obligations under the policy at any time. A dispute over the legitimacy of that overpayment remains ongoing between Mr. Wasson and Sun Life, forming the basis for the within action.
[29] The affidavit filed in the earlier hearing described both the nature of the claim and the problems and locating the plaintiff. The following extracts give an overview of the situation:
“On March 18, 2014our office wrote to Mr. Wasson advising him of the Status Notice. We also wrote to Mr. Wasson requesting that he contact our office in order that we might discuss the progress of his file. …. These letters would be returned to our office, with markings on the envelope indicating that Mr. Wasson did not reside at the address listed.
Upon my review of the file, I understand from an internal memorandum that Mr. Wasson advised by telephone that he had moved to a new address in Oshawa, Ontario, and that he had intended shortly thereafter to visit the United States to have knee surgery.
On May 7, 2014, a Notice of Status Hearing was signed by the Registrar, requiring our attendance at a Status Hearing on September 9, 2014. ….
Accordingly, also on May 7, 2014, we wrote to Mr. Wasson to again request that he contact our office so that we may discuss the status of his file and receive instructions. …
On the same day, our office wrote to counsel for the Defendant, advising him of our repeated attempts to contact our client and advised that we might possibly move to remove ourselves as solicitors of record should our attempts at reaching Mr. Wasson continue to fail….
On May 20, 2014, I did meet in person with Mr. Wasson to discuss his employment status at the time and the status of his injuries. At this meeting, I discussed the next steps that ought to be taken on his file, to which Mr. Wasson agreed.
Pursuant to Mr. Wasson's instructions, on May 23, 2014, our office served on the Defendant a copy of our Notice of Intent to Defend Counterclaim.
I am advised by Ms. Jesseca Dudun, my legal assistant and verily believe that on September 8, 2014, she spoke with Mr. Wasson’s wife regarding the Status Hearing scheduled for the next day. Ms. Dudun was informed by Mr. Wasson's wife, and has subsequently advised me that he is under a lot of stress and simply has chosen to not deal with this matter, nor return our calls despite our attempts….
On September 9, 2014, I attended the Status Hearing before Master Short. In light of the foregoing I requested that the hearing be adjourned to November 24, 2014 as I did not have instructions from Mr. Wasson to move the matter forward”
VII. Status Hearing. Adjournment
[30] On the September 9 return date, I was not prepared to deal with a removal of the lawyer of record at the same time as the scheduled Status Hearing. Moreover, I felt that in such circumstances there had to be better evidence of attempts to make proper service upon the client..
[31] As a consequence, I adjourned the matter to February 2015. To allow sufficient time for the plaintiff to be served with proper notice of this Status Hearing. As well, I scheduled a December removal of lawyer motion, which would be heard if necessary, sufficiently far ahead of the date of the Status Hearing to permit the matter to proceed in February, regardless of whether or not new counselounsel were appointed.
[32] If properly served and no new counsel were no new counsel were appointed within the time period provided in rule 15.04 and the time for the lawyer to remain on the record under rule 15.05 which provides that a lawyer of record shall act, and remain as lawyer record for the client until the client delivers a notice under 15.03 or an order removing the lawyer for the record has been entered served on the client every other party, and filed with proof of service.
[33] I endeavored to provide sufficient time periods within the schedule to comply with the various requirements in the rules as I would not have been prepared to proceed with such a motion until the 30 day period contemplated by rule 15.04(8) had elapsed.
VIII. Plaintiff Found
[34] They further efforts to serve Mr. Wasson proved successful in the cross-motion did not proceed as he wished to continue with his original counsel.
[35] The affidavit now filed by the plaintiff with a view to showing cause why the action should continue, reads in part:
“24. I am advised by Ms. Jesseca Dudun, legal assistant to Ronald Preyra and verily believe that on September 8, 2014, she spoke with Mr. Wasson's wife regarding the Status Hearing scheduled for the next day. Ms. Dudun was informed by Mr. Wasson's wife, and has subsequently advised me that he had been under significant stress due to his physical pain and deficits, and due to his financial situation, and had simply become overwhelmed by his circumstances but that he wished to deal with this action as he felt that he was being treated unfairly by the Defendant.
- Of note, throughout this proceeding counsel for Sun Life has threatened to proceed with a motion for summary judgment in respect of the crossclaim however has not taken any substantive steps in respect of that claim. Specifically he has not;
i. Closed pleadings
ii. Delivered an Affidavit of Documents
iii. Arranged for Examinations of Discovery
iv. Delivered any documentation relevant to this action;
v. Attempted to schedule a mediation
31.…. any delay in moving this matter forward was based entirely on the fact that counsel had been canvassing the possible resolution of the claims presented in this action and were having difficulty obtaining instructions and locating the Plaintiff and in no way reflected an unwillingness to proceed with the claims or a dilatory attitude towards same….
[36] Counsel also confirmed that the firm has obtained updated contact information for the plaintiff including telephone number and accordingly it is expected that in the future delays due to loss of contact with Mr. Wasson will not be repeated.
IX. Applicable Law
[37] Because this motion came to be argued during a period of transition, I note that that rule 48.14 (12) provides that any Status Hearing, scheduled, but not held, before January 1, 2015 will proceed under the old version of Rule 48. The transition rules make it clear that if a status notice is received by the parties prior to January 1, 2015 will cease to have effect on that date, unless a Status Hearing has already been scheduled or the action is already been dismissed [see rule 48.14 (11) and (13). ]
[38] This Status Hearing was clearly scheduled prior to the year end and thus the previous rules apply. Nevertheless, the fact of the repeal, in my view, is still a factor to be taken into consideration in determining whether or not to set a registrar’s dismissal.
[39] This of course is a Status Hearing, and not a set aside dismissal motion. I have difficulty understanding why a plaintiff seeking to proceed bears a heavier onus than one whose action has already been dismissed. But that seems to be the direction of many of the older cases. Be that as it may, I am satisfied that a contextual approach should be equally appropriate in weighing the factors to be considered at a Status Hearing.
[40] Here if a Status Hearing not been scheduled the action would be unaffected by time limits until January 1, 2017
[41] This case does not cry out for teaching this plaintiff a lesson at the cost of not having the dispute resolved on the merits.
[42] 2012, I had I heard a contested Status Hearing, which led to lengthy reasons canvassing in detail, the law in this area. I see no reason to retract any portion of my reasons in 1667207 Ontario Inc. v. Botnick 2013 ONSC 153, 36 C.P.C. (7th) 354; 2013 CarswellOnt 1104.
[43] While that decision was under reserve, Justice Jennings sitting on the Divisional Court dealt with this area in Malik v. 1645156 Ontario Ltd., 2012 ONSC 2887.
[44] There the court upheld the decision of Master Jean dismissing an action for delay having held that the onus is on the plaintiff to show cause why the action ought not to be permitted to proceed. Justice Jennings observes:
3 The Master correctly stated the law - the onus is on the plaintiff to show cause why the action ought to be permitted to proceed by explaining the reasons for the delay and demonstrating no prejudice to the defendant. She understood she was to take a contextual approach to her consideration of the issues so as to ensure a just approach.
[45] . Counsel for the defendant referred me as well to an earlier decision of Jennings, J Oberding v. Sun Life Financial, 2010 ONSC 3301. 2010 ONSC 3303, 267 O.A.C. 120; 2010 CarswellOnt 5276; 191 A.C.W.S. (3d) 79. There the applicable law is summarized succinctly:
14 Status hearings are regulated by Rule 48.14 of the Rules of Civil Procedure. Of significance for this proceeding, Rule 48.14(13) provides as follows:
At the status hearing, the plaintiff shall show cause why the action should not be dismissed for delay and,
(a) if the presiding judge or case management master is satisfied that the action should proceed, the judge or case management master may,
(i) set time periods for the completion of the remaining steps necessary to have the action placed on or restored to a trial list and order that it be placed on or restored to a trial list within a specified time,
(ii) adjourn the status hearing to a specified date on such terms as are just, or
(iii) if the action is an action to which Rule 77 may apply under rule 77.02, assign the action for case management under that Rule, subject to the direction of the regional senior judge,
(iv) make such other order as is just; or
(b) if the presiding judge or case management master is not satisfied that the action should proceed, the judge or case management master may dismiss the action for delay.
Accordingly, the Rule imposes an onus on the plaintiff to show cause why the hearing should not be dismissed for delay. While Rule 48.14(13) grants discretion to the status hearing judge, that discretion must be exercised in accordance with the applicable legal principle.
15 The test to be applied in determining whether the plaintiff has met such onus was set out by Carnwath J. in Savundranayagam at para. 13. The status hearing judge must be satisfied both that there is an explanation for the delay that justified continuation of the action and that there is no prejudice to the defendant, which we understand to mean non-compensable prejudice.
16 Although it is unclear what whether Wilson J. intended to articulate a different standard in Clements v. Greenlaw, the test in Savundranayagam was recently applied by Glithero J. in Riggitano v. Standard Life Assurance Co. [2009] O.J. No. 1997 (S. Ct.), which decision was affirmed on appeal by the Court of Appeal 2010 ONCA 70, [2010] O.J. No. 292 (C.A.) without specific reference to Savundranayagam. We would also note that the facts in Clements v. Greenlaw, including the approach adopted by the Master whose judgment was the subject of the appeal, were significantly different from the present proceeding and that it does not appear that the decision in Savundranayagam was brought to the attention of Wilson J.
17 Accordingly, we are satisfied that the applicable test in the present cross-appeal is that set out in Savundranayagam.
[46] My Kingston colleague, H. MacLeod-Beliveau J. addressed the then current state of the test last year in here decision in 3 Dogs Real Estate Corp. v. XCG Consultants Ltd., 2014 ONSC 2251; 120 O.R. (3d) 123. In her review of case law developments she notes:
36 In Nissar, at para. 29, the Court stated that it adopted the factors informing the Rule 48.14(13) test set out in 1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544, 112 O.R. (3d) 67. In 1196158 Ontario Inc., Sharpe J.A. wrote at para. 19:
Failure to enforce rules and orders undermines public confidence in the capacity of the justice system to process disputes fairly and efficiently. On the other hand, procedural rules are the servants of justice not its master. We must allow some latitude for unexpected and unusual contingencies that make it difficult or impossible for a party to comply. We should strive to avoid a purely formalistic and mechanical application of timelines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits. As Laskin J.A. stated in Finlay v. Van Paassen (2010), 101 O.R. (3d) 390, [2010] O.J. No. 1097, 2010 ONCA 204, at para. 14, "the Rules and procedural orders are construed in a way that advances the interests of justice, and ordinarily permits the parties to get to the real merits of their dispute."
37 While I recognize that the "thrust of the recent case law from the Court of Appeal is that a judge or master presiding at a status hearing is not to aim at fixing a tardy action but at dismissing it, unless there is cogent evidence in the record establishing a reason not to do so" (Saini v. Sun Life Assurance, at para. 8), neither Faris nor Nissar offers any substantive explanation of what factors the court ought to weigh in determining what is an "acceptable" explanation for delay within the meaning of the test. I do not interpret these cases to unequivocally state that the court cannot apply a "flexible", "contextual" or "balancing" analysis to its interpretation of the two-part conjunctive test. In fact, I find that such a "contextual" analysis is required by the first stage of the Khan test. In order for the court to determine what is an "adequate" explanation, the totality of the circumstances must be examined having regard to the competing interests at stake and the interests of justice. One factor, but not necessarily the determinative factor to be considered is the general rule that "the party who commences the proceeding bears primary responsibility for its progress": Faris, at para. 46.
38 What is "acceptable" will necessarily turn on the facts of each case. "An "acceptable" explanation should not be read as necessitating a finding of a "good" explanation. An explanation that is "adequate" or "passable" ought to suffice.": 2046085 Ontario Inc. v. Raby, 2014 ONSC 774, [2014] O.J. No. 576, at para 6 (Master Glustein). Similarly, the Court of Appeal has held that "acceptable" does not necessarily mean "good", but means "able to be agreed on; suitable...adequate; satisfactory.": R. v. Seaway Gas & Fuel Ltd., 2000 CanLII 2981 (ON CA), 47 O.R. (3d) 458 at para. 28 (C.A.). Thus, in this case, recognizing that the burden is on the plaintiff to establish that the reason for the delay is "acceptable", I find that the principles of fairness, the bona fide explanation advanced by the plaintiff, and the reasons underlying the plaintiff's impecuniosity are the primary factors that weigh against the countervailing considerations outlined in the jurisprudence. Thus, in this case, the plaintiff's explanation constitutes an "acceptable" explanation for the delay within the meaning of Rule 48.14 (13). [my emphasis added]
[47] Here I have concluded that in all the circumstances there is an acceptable explanation for the delay that justified continuation of the action and that there is no apparent non-compensable prejudice to the defendant.
X. Relevance of Counterclaim in Contextual Analysis
[48] . In coming to that conclusion I have particularly been influenced by situation in this action where the same facts are relevant for both the Counterclaim and the main action with respect to the meeting of the policy terms and the extent of any entitlement of the plaintiff. Under rule 24.03 were an action against defendant who is Counterclaim is dismissed for delay, the defendant may, within 30 days after the dismissal deliver a notice of election to proceed with the Counterclaim (Form 23B), and if the defendant fails to do so the counterclaim shall be deemed to be discontinued without costs.
[49] For the insurer to escape any potential liability to the plaintiff in this factual matrix while maintaining an opportunity to recover any overpayment made to the plaintiff, fails to meet the requirements flowing from my interpretation of the dictates of rule 1.04.
[50] The Rules are to be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. In my view, were I to only allow the defendants counterclaim to proceed, that general principle would not be properly respected.
[51] I see no real prejudice of the nature upon which the defendant could be entitled to rely. In this case, the plaintiff has been endeavouring to recover whatever he may be entitled to from various sources.
[52] He may well have been responsible for a degree of contributory negligence by virtue of his having to chosen to “jaywalk”across a busy highway. Such a circumstance does not normally impact on WSIB compensation amounts. Similarly, the disability policy amounts are unlikely to be subject to reduction because of his contributory negligence.
[53] Until the extent of the recovery from other sources was finally established it may well have been premature to endeavor to resolve the plaintiff’s claims against his employer’s disability insurance carrier.
[54] In such a context I see no meaningful delay that would require me to prevent the plaintiff from proceeding with his action in this case.
XI. Disposition
[55] I am therefore satisfied that the plaintiff has showed adequate cause why this action not to be dismissed at this time. I expect the parties to now press this matter forward to trial or settlement in a reasonable period of time. Towards that goal. I expect that counsel will consult and arrange for the necessary steps to be taken on a timely basis.
[56] To keep the case moving I am requiring as a term of this Order that the plaintiff deliver his defence to the Counterclaim within 30 days of the release of this judgment.
[57] If the parties are not able to agree on a discovery plan and a case timetable, within 60 days of the release of these reasons, I will hold a case conference and establish a timetable for them. If a conference is required, it may be scheduled by contacting my Assistant Trial Coordinator.
XII. Costs
[58] This case presented unusual complications. The plaintiff is being granted an indulgence and may end up owing the defendants a repayment amount.
[59] The insurer has taken the position that this individual was no longer entitled to coverage after the 2 years old occupation coverage..
[60] The parties agreed at the hearing of this motion at $2500 was a reasonable cost amount for the victor. Here the plaintiff is the author of some of the difficulties, by failing to keep in contact with counsel, by his failing to keep in contact with his counsel. This is a complex area of the law and is is dead and his difficulty in dealing with the intersecting problems is somewhat understandable. Nevertheless, the defendant has been put to costs of this motion and to both the preparation of materials and attending on more than one occasion to deal with the matter in court. The defendant is therefore awarded $2500 from the for the costs of this motion, which costs are to be payable in the event of the cause. To be clear those costs are to be payable in the event of the cause of the counterclaim. If the defendant succeeds in its counterclaim it will entitled to payment of that $2500 amount.
R.114/DS __________________
Master D.E. Short